need macroeconomics assignment help in questions below

Posted on 2014-10-17 07:12:00 in Economics by SAIMA

1. In the General Theory, Keynes says, “It may well be that the classical theory represents the way in which we should like our economy to behave. But to assume that it actually does so is to assume our difficulties away.” What are the “difficulties” that the classical doctrine assumes away? Describe the underlying assumptions that allow the classical theory to assume these difficulties away.

3. Keynes says that money plays an essential part in his theory of the rate of interest. Carefully explain.

4. How is the volume of employment determined in the General Theory? Classical Theory?

5. Gilder says that the capitalist elite “give in order to get. They supply in order to demand.” What do they “give” and why do they do it? What do they risk? Why is it important? Who benefits? What can/should government do to encourage them to give more?

6. Gilder is critical of classical economists who emphasize perfect competition, consumer sovereignty and supply & demand graphical analyses. Why?

7. Gilder’s argument has been sarcastically characterized as: The poor won’t work because they have too much money, and the rich won’t work because they have too little. Explain both sides of the argument (i.e. Gilder’s own argument and the criticism of it).

8. The classical model assumes an exchange economy,, while The General Theory examines a monetary production economy. What is the difference, and why does it matter?

9. It has been argued that the classical theory is more applicable to a socialist economy. Explain.

10. Contrast the Loanable Funds theory of the rate of interest with Keynes’ Liquidity Preference Theory.

11. Keynes objected to Pigou’s view that flexible wage rates would cure unemployment. Discuss Pigou’s argument and Keynes’ practical and theoretical objections to Pigou’s view.

12. Minsky argues that a major part of the substance of The General Theory was lost with the formulation of Keynes argument into the neoclassical synthesis (i.e. IS/LM). Describe the “substance” of The General Theory that Minsky says was neglected.

13. Axel Lejonhufvud defends Keynes’ analysis as the one that is “generally” applicable, and he insists that the classical model applies only as a “special” case. What makes the General Theory “general” in his view? Why is the classical theory only applicable as a “special” case? Keynes would agree with Leijonhufvud’s conclusion but disagree with his reasoning. Explain.

14. Is the classical model a no-growth (i.e. static) model? How can output and employment increase over time? Give examples of policy-induced and “natural” (i.e. without intervention) sources of growth.

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